Note that I will be speaking on the currency panel at the 5th Global Independent Research Conference on 3rd February in London (1 Wimpole Street). Independent research providers will be debating their views on a range of investment topics through panel discussions. This conference is for the buy-side community including Portfolio Managers, Chief Investment Officers, Fund Managers, Strategists, Analysts and
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Read moreFinancial-market post-mortems for 2019 are out and the bottom line is that the trade was to be long pretty much everything – including US and global equities, bonds and commodities (bar natural gas) – but short equity and FX volatility. Trading FX last year was indeed an exercise in both patience and timing with depressed currency volatility going hand-in-hand with
Read moreThere is a growing consensus that global economic growth will slowly recover in 2020, particularly in the second half of the year. We made this prediction nearly four months ago in Central banks to the rescue…with a lag (27 August 2019), pointing to the positive, lagged impact of central bank rate cuts on global GDP growth. Since May, the global
Read moreSterling has appreciated 1.5% in Nominal Effective Exchange Rate terms since 26th November to a 7-month high, a notable move in a world of depressed currency volatility. Markets have seemingly taken comfort from the (modest) widening of the gap between the ruling Conservative Party and opposition Labour party in opinion polls to about 10pp and YouGov predicting that Prime Minister
Read moreThis report updates the monthly seasonal patterns of 32 major Nominal Effective Exchange Rates (NEERs) going back to May 2010, using over 90,000 daily data points with trade-weights derived from the BIS (April 2019) and national central banks (see Nominal Effective Exchange Rates: Monthly seasonal patterns, 10 January 2019). A number of factors can drive currency seasonality, including underlying seasonal
Read moreGlobal FX volatility has fallen further in the past month to its lowest level since September 2014 according to our estimate (see Figure 1). Volatility in most major currencies has either fallen or only increased marginally in the past month and is now very low relative to the past 12 months. Sterling, the Brazilian Real and Turkish Lira have recorded
Read moreWe noted in “Renminbi depreciation true to form” (6 June 2019) that history was repeating itself, with the Renminbi NEER having weakened in April-June as it had done in May-July 2018, albeit at a more modest pace (see figure 1). This was a clear indication in our view that “Chinese policy-makers were once again using Renminbi depreciation as both a
Read moreThe Korean Won Nominal Effective Exchange Rate has appreciated 4.7% since the 41-month low recorded on 12th August to a six-month high, with the Won up against the currencies of Korea’s largest trading partners, namely the Yen, Euro, Renminbi and Dollar. A common view is that, with China accounting for about a third of Korea’s total trade, day-to-day speculative flows
Read moreIn US Consumer – From King to Prince (8 October 2019), we argued that “the recent fall in US consumer confidence, slowdown in income and wage growth and jitters in US equity markets suggest that Personal Consumption Expenditure (PCE) growth remained weak in September and thus slowed materially in Q3” (September data are due on 31st October). Weak September retail
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